There has been chatter in the UK about the creation of a "toxic bank" to house the ghastly assets not wanted by the British banks. One potential result would be to see the Royal Bank of Scotland (RBS) halve in size. It would be in the strange position of having no assets left from its ABN Amro acquisition but would still be paying for it.
www.searchifa.co.uk
I suppose British premier Gordon Brown looks at the electoral calendar and has decided he has not got enough time for the banks to gouge out the profits from UK consumers and corporates while it slowly writes off the problematic items on its balance sheet. The prime minister wants the British banks to lend again but they have instituted very conservative lending standards in the residential property sector and they don't seem to have any desire to lower them.
The UK economy is very dependent on the housing sector. House prices have fallen badly but there has not been any sign of real capitulation selling. For instance, the buy-to-let sector has held up well given the implosion of the main lender
Bradford and Bingley. If vendors start accepting the offers being actually made then
it will at least get the transaction numbers moving.
Hopefully, the toxic bank will not have to take lots of mortgage loans but unfortunately it will be full of acronym rubbish such as SIVs, CDOs as well as a load of corporate loans.
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